Marketing Research Project

MKT412 - Marketing ResearchProfessor Ilgim Dara

Spring 2015 Hannah Dion, Yvonne Dygon, Austin Urkiel, Vinnie Virga

Table of Contents

Executive Summary…………………………………………..………...……….. 2Introduction……....…………………………………………………………….... 3Research Objectives………………………………………………………….….. 3

Literature ReviewHypotheses

Concise Statement of Method………………………………………..………….. 5Research Method and Procedures

Focus GroupSurvey

Results…………………………………………………………………..……….. 7Focus Group

Individual Participant ResponsesSurvey

Inferential StatisticsDescriptive Statistics

Summary of Key Findings……………………………………...……………… 12Conclusion and Recommendations…………………………………………...... 12

ImplicationsLimitationsFuture Research

Appendix……………………………………………………………………….. 16Focus Group QuestionnaireSurvey QuestionsReferences

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Executive SummaryEntering this research project, this team proposed that there was a significant difference

between price and quality in regards to college students grocery shopping preferences. We decided to use this research project to determine whether the location of Whole Foods stores near college campuses would be a worthwhile investment for the company. Approaching the research with this perspective in mind, it is important to get to know our target market first.

Many studies have been conducted on college student food preferences, however these studies tend to focus more on the on-campus college meal-plans and dining commons rather than on grocery stores. Our initial secondary source research suggested that students prefer quality over price in the instance of on-campus dining. They also favored more healthy options, and were willing to pay more for those options.

After conducting our field research, the findings of our study were not as favorable in regards to a preference of quality over price. In fact, our research indicated that price was more valued than quality in regards to grocery shopping habits of college students; this in turn does not support an investment of Whole Foods to building locations near college campuses. The research this team conducted did uncover a lot of other factors that would be considered by students when shopping for groceries, which could prove useful to Whole Foods if they decided to restructure their stores to meet the demands of this target market.

We conducted a focus group of six participants who were college students, from a mix of different colleges though primarily students of the University of Massachusetts Amherst. The purpose of the focus group was to serve as exploratory research: uncovering what factors that we could then use a survey look into more in-depth. After the focus group, we discovered many factors that play in the decision making role of where to shop for groceries other than price and quality. These factors included convenience, time, location, and the amount of hours worked prior to shopping (which contributes to their disposable income or weekly budget for groceries). Utilizing these findings, the questions of our survey were structured to delve deeper as a means for testing if they held true on a larger scale.

Qualtrics was used to create a survey. We collected a random sample of 141 respondents; 36 male college students, and 65 female college students. Our goal was to gather the opinions of college students, since they are who we aim to target and locate near. We filtered out all respondents who were not currently enrolled in a college or university.

When it came time for the quantitative data, we made the survey first, then developed two hypotheses. Our first hypothesis was that, students prefer quality over price. The second hypothesis stated that, females would have a more positive attitude towards Whole Foods than males. Our professor looked over the hypotheses and the proposed tests, and offered some insight to revise our survey. Our goal was to find college students, both male and females to take the surveys, with a quota of 30 females, and 30 males for our hypotheses, and the t-tests. We then launched the survey on Facebook, and encouraged others to share the survey as well. After

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three days, we received 87 responses, and by the time we were prepared to interpret the results we received 141 responses. We then analyzed the results after our quotas were met, and began to develop the implications of the results to Whole Foods.

We were able to apply our research findings to our investment proposal. We found that placing a Whole Foods near college campuses would not be a profitable investment; the college student grocery shopping market valued price over quality which did not meet the business level strategy of Whole Foods Market. Convenience of location near a university would not be enough for Whole Foods to overcome the preferences of less expensive alternatives at equally convenient nearby locations off campus.

IntroductionWhole Foods Market, Inc. is an American foods supermarket chain specializing in

organic food, including produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, beer, wine, cheese; in addition to whole body, floral, pet products, and household products. Since its opening in 1980, the company has maintained the strictest quality standards in the industry and an unshakeable commitment to sustainable agriculture.

Whole Foods Market is a dynamic leader in the quality food business. They are a mission-driven company that aims to set the standards of excellence for food retailers by building a business in which high standards permeate all aspects of the company. Whole Foods embraces their responsibility to co-create a world where their employees, customers, and surrounding communities can flourish, all the while, celebrating the sheer love and joy of food.

Research ObjectivesThis report’s research objective concerns quality and price. Are students willing to spend

more money for groceries that they perceive as having a high quality, or is price and budgeting too big of a factor when purchasing groceries off-campus? Whole Foods Market was the perfect candidate for this research objective because of the high quality standards held on the foods being sold, and the Hadley Whole Foods store being located within 10 miles of the University if Massachusetts Amherst campus. The answer to this research objective will provide insight into whether it would be financially advantageous for Whole Foods Market to open locations nearby college campuses.

Acknowledging that there is a Whole Foods store currently located within 10 miles of the University of Massachusetts Amherst, are students of this university currently purchasing their groceries at this store despite the plethora of cheaper alternatives? If the answer is yes, then would it benefit Whole Foods Market to adopt a national policy of having a location within 10 miles of major universities and colleges? If students are not purchasing their groceries at Whole

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Foods, what about the company or its competitors is causing them to purchase their groceries elsewhere?

We chose to focus specifically on college students because of the recent health and exercise trend, as well as the uprising efforts from society to increase knowledge on what our bodies are actually consuming in the food we buy from the grocery store.

Literature ReviewWe decided to do some initial research before doing our own experiments. We came

across previous literature review which examined price and quality on college campuses, however the conditions of those experiments were different. From our findings, previous research seemed to focus on the relationship of quality and price on campus, such as dining halls, rather than off campus, like grocery stores. Newman supports that students do prefer quality over price. Some students were willing to pay 10% more for their meal plans if they were to increase the quality of food, as well as offering healthy options.

In a study by the Hartman Group, students are interested in higher quality foods. Commonly, the perception comes from large companies manufacturing things on economies scales where they start losing their quality. Hartman states, “‘High quality’ belief is the perception that the food in question is not manufactured by a large food company. This leads us to believe that smaller markets, or locally-owned stores will be perceived as having a higher quality, and may be typically priced more. This opens the discussion for example, mom & pop stores --they may have implications that they could have higher quality, but also higher prices, but who is to say? It could also be cheaper quality, but since the resources are scarce, and may not have established a good connection with vendors or economies of scales, they pass the costs onto the products, thus having higher prices as well.

In a study by Newman in 2013, they were able to support that students prefer quality over price. In fact, students claimed they would pay up to “10 percent more” for healthier options on-campus. However, this leaves the question open to options off-campus.

McMillan states, “Whole Foods’ central conceit as a company is that it sells only the best, healthiest food-- which sometimes requires paying more.” This sets the standard for Whole Foods being perceived as both high quality and expensive. There is the motto, “you get what you pay for” which some may believe in, and it applies to this statement. However, in this article, a Whole Foods located in Detroit, an unusual location (given the higher prices of their products) seemed mismatched in this neighborhood. Why open a store there? “Whole Foods’ answer was even more surprising: The store, said company leaders, was about social equity as much as profit.” (McMillan, 2014). The article also talks about the health implications it has towards fighting obesity, which the city of Detroit was tackling, and Whole Foods as well-- wanted to give accessibility to all. As a result, Whole Foods lowered the prices of their items to accommodate the people of Detroit.

Lastly, in another case study by Student Watch in 2011, it revealed details about snack foods, exercise habits, purchasing habits on clothes, electronics, as well as food preparation. As

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far as consumer habits in general (not specific to groceries), price influences 93%, location at 89%, and product selection at 87%. Regarding home-cooked meals, but not necessarily grocery shopping, they observed that college students are restricted by a few factors. They have the factor of time: with balancing a job, assignments, finals, and studying, and may be restricted by space in their housing situations. Some dorms may not be big enough for appliances to cook certain meals in. They may not have a stove or oven (which eliminates products like turkey for example), and may only have access to microwavable meals.

HypothesesIn coordination with the creation of our Survey, two hypotheses were established to help

use the data collected to examine our research objective. The two hypotheses are as follows:Hypothesis 1: Students prefer price over qualityHypothesis 2: Females will have a more positive attitude towards Whole Foods than

malesThe first hypothesis involves the goal of Whole Foods’ expansion. Are students typically

concerned with price? In the company’s mission statement, and on their website, emphasis is placed on the value education and supporting schools and education. “...so that we can plant trees and encourage kids to stay in school. One by one, we try to expand what’s possible for individuals, (and) then for neighborhoods.” That is why we are focusing on student’s opinions of the matter. If students are influenced by price more than quality, and Whole Food’s has a perception of being expensive, this would be a red flag for the expansion plan we intended this research to support. If college students did prefer price over quality then it would be financially and strategically detrimental to open Whole Foods locations within 10 miles of college campuses. If the perception of Whole Foods is it being expensive, than college students will simply elect to shop at cheaper alternatives that are equally conveniently located within that 10 miles radius.

The second hypothesis involves a perception that females are more concerned with quality than price. The current health-craze which involves yoga, running, dieting, etc. has underlying implications of self-image. We feel as though females are more concerned with staying toned, and fit, especially for the summer, and due to societal standards. Considering Whole Foods’ reputation as being a healthier and higher quality destination as found in the literature review article by McMilian, logic would follow that females might be an important subgroup within the college student market. Responses recorded during our focus group noted that the females have a higher opinion of higher-quality, so we felt it was important to see if females would have a more positive attitude towards Whole Foods than the males that took our survey.

Developing our survey question before we declaring our hypotheses, we had to alter some of the survey questions to better test the premises of our hypotheses. This will be discussed in more detail later in this report.

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Concise Statement of MethodThrough the constricted resource of time, we were able to do basic secondary research of

literature review of previous case studies regarding the issue of price and quality, conduct one twenty minute focus group of 6 participants, and distribute a survey online through Qualtrics which had 141 responses.

Research Method and ProceduresFocus GroupA focus group was conducted with six participants taken from a convenience sample.

They were recruited through Facebook, or through personal friends. Each of our four team members pooled in $5.00 of our own money to create a $20.00 incentive for coming to the focus group. The $20.00 would be awarded to one winner in our focus group from a random drawing. We reserved a room in Isenberg (G12) for Wednesday, March 3, at 6:00PM (we figured our participants would be able to meet later, rather than earlier seeing that classes are more commonly held during the day). Our respondents were college students (UMass and Assumption College) ranging from Freshman to Juniors. We chose college students specifically because our objective is to determine if putting a Whole Foods store near a college campus would be beneficial, by capturing the college campus segment of consumers. We refrained from revealing any information to the participants about what the focus group concerned prior to the activity to minimize any social desirability bias. On the day of the focus group, Isenberg double booked the room we had reserved for our group, so we had to improvise quickly with our participants waiting and ready to start. We found an empty classroom, arranged the desks in a crescent shape for the respondents, and closed the door (to ensure confidentiality, and make the participants feel more comfortable and open in the discussion.) We did record our focus group with both video and audio. Given the active participation of our group, the focus group was completed in roughly twenty-five minutes.

Focus groups are an important part of exploratory research. Although literature review is available, it was not clear what factors contribute to the price vs. quality debate. As our focus group indicates, there are other factors such as convenience, or time that also influence their consumption behavior. By uncovering these, it will guide us more specifically in our quantitative research. When it comes to the survey, perhaps we can ask them a Likert Scale question, “I feel as if there is not enough time in the day to go grocery shopping” or something similar.

Two females were recruited, and four males. The goal was to have a balanced focus group of three males and three females, but some recruits did not follow through. However, the gender difference did not seem to play a role in our focus group, since the female respondents were very active in the study with their input.

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Vinnie was the moderator, while the remaining group members observed both visual, and audio cues of assigned participants. We video recorded the focus group so that we could go back and write transcripts, as well as watch for any other aspects we may have missed. Everyone, with the exception of the moderator was responsible for observing two participants. Hannah and Yvonne were assigned males, while Austin was assigned the two females to diminish any bias from similar genders. Before starting the focus groups, the respondents filled out a quick questionnaire regarding some demographic questions about himself or herself, and were collected prior to getting into the questions. The demographic questionnaire and focus group questionnaire can be found in the Appendix.

Our moderator, Vinnie was successful in probing answers out of the participants, and often encouraging expanding upon responses. He also established comfortability for the focus group, since there was often laughter between the participants. Additionally, he successfully got responses about weekly budgets; money can be a sensitive topic, that people avoid, but since the question was asked later in the survey, rapport was established beforehand.

At the end, we asked the focus group what they thought the purpose of the study was in our debriefing statement. We also announced the winner of the $20.00 random drawing and thanked the participants for their time.

SurveyWe devised a survey using Qualtrics. Our goal was to incorporate our findings from our

exploratory research from the focus groups into our questions and choice options. The survey was completed, and the hypotheses were then formulated. We looked to the professor to check our hypotheses, and gathered some feedback. We made some adjustments to our hypotheses, as well as our survey questions. For our hypotheses, it was determined that an independent sample t-test or ANOVA test would be used, and therefore needed a minimum of 30 respondents. Additionally, we needed 30 of those respondents to be female college students, and 30 male college students. We adjusted our questionnaire to allow for filtering of variables (students, and gender); For example, we asked if college the respondent was a college student, and had multiple categorical options to choose from (yes - part-time, yes-full time, no, etc.), however we eliminated unnecessary wordiness, as well as tried to simplify our analysis for later. Therefore, the options were left to just a categorical yes or no option.

We followed through, checking all of our questions, as well as determining the right page breaks, and other survey options for our survey. We decided to randomize the choices for the respondents to reduce any response bias that we may have unintentionally caused by listing things in order. We also blocked respondents from jamming the results with multiple submissions to reduce sample error. With this feature, it recognizes the user’s IP address on their computer, and will prevent someone from taking the survey more than once. During the time of the distribution of the survey, we kept the survey on “Survey lock”, which meant that no one could edit it by accident, and introduce error into the results. A display logic was introduced to

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the question, “Have you shopped at Whole Foods grocery store in the past 6 months?” so that when the respondent clicked “yes”, they would be directed to “On average, during a typical visit, how much do you spend at Whole Foods?”; if they clicked “no”, they were redirected to the question, “Why do you choose NOT to shop at Whole Foods, either currently or in the past?” with a text-box to explain.

We also included a text-box for comments or issues they may have experienced during the survey, and looking through, some said that it seemed regional (some of the stores that they shopped at were not listed in our generated list).

The survey was published on April 3, around 3:00PM by distributing the link through Facebook for respondents to take and share with their network of friends, as well as asking college students on campus from Isenberg. On April 7, 2015 after we exceeded our quota, the survey was closed.

RESULTSFocus Group

Quickly we established that participants cared about location. For example, one respondent uses public transportation on campus. Transportation limits his trips to where he can go, and also what he can buy. This participant simply goes to Big Y because it is the closest supermarket to his dorm, and the bus stops right in front of it. He further explains that he has to walk up a hill to his dorm, so it also restricts him from buying cases of water and other big, heavy, bulky items.

There are items in which the participants were willing to spend more on. For example, one participant was willing to spend more, or change stores to purchase a certain brand of deli-meat: Boar’s Head. However, when it came to non-perishable items, such as bottled water, it did not matter what brand or if it was a no-name brand--what mattered was the price and what participants could purchase cheapest.

Individual participant responsesParticipant A: Participant A was one of the most active members of our

group. As a student of Assumption College, she gave a more diverse perspective to the focus group, including shopping stores not in the Amherst or Hadley area. Participant A is a Junior student who recently moved off-campus into a small apartment with friends. As we learned more about the participant, we discovered her weekly spending budget of roughly $20-$40/week with one shopping trip a week. She also mentioned time as a large factor of her shopping habits, stating that she is typically only able to go on weekends, and is unable to prepare beforehand (including, looking at flyers and/or searching for coupons). Participant

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A mentions nearby stores such as Shaw’s and Price Chopper as her favorite stores to shop at, based on their low costs, and their “no membership” shopping experience. She goes on to say that, “higher quality does not always outweigh higher costs”. Participant A is a shopper who seems set in her ways and understands her budget, time, and interests when ranking quality over costs.

Participant B: Participant B is a junior here at Umass. She was also an individual who had no trouble contributing towards the focus group discussion. She is an undergrad working as a part-time waitress with an ever changing budget due to business. She attempts to store $40 a week away for groceries but that is also dependent on her weekly tip income. Due to her ever changing budget she tends to take her grocery shopping to stores she’s familiar with including Big E’s and Walmart, which offer the cheapest possible prices for her budget. She also went on to say that she actually rates products in importance and some products she is not willing to settle for. Store brand prices may be beneficial, but items such as meats or drinks, she is not willing to settle on low value items. She is not an active deal finder, but she will take coupons from parents when they offer them, or if she sees a good deal at the store. Participant B, along with the others, mentions time as her main concern when searching for the best weekly deals. One comment that stuck out to our team as a surprising statement was when Participant B mentioned she believes she would rate quality over quantity. Based on the direction this respondent had answered thus far in the focus group, we were interested in her reasoning behind that decision. She went on to say that she would often chose to buy less of higher quality items than more of lower quality ones. Although Participant B was on a continually fluctuating budget, she was still interested in finding the best items she could afford during that given time.

Participant C: Participant C is a freshman at UMass. He started off the focus group by sitting up straight with confidence as he raised his hand to answer the first question. He responds by explaining how he uses the vending machine more often because he does not have snacks in his dorm, where he is usually spending time in the basement, and therefore feels obligated to use it. He agrees to the convenience factor of the vending machine. During the second question, Participant C seemed pleased from Participant F’s explanation of how Big Y gives out a Silver membership card to student. He does not grocery shop when he is at school or living at home, so he is unable to answer most of the remaining questions. He does add that he thinks Stop and Shop has higher quality brands (maybe his parent shop there?). He disagreed with Participant A’s comment about smaller stores having better quality, describing that bigger stores have an advantage over smaller store because they can buy more of an item and hold it at a lower price. When he has gone to the grocery store for his parents at home, he always brings their Stop and Shop card to receive certain discounts. He was the only participant to answer that he thinks price is more important than value. He

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also thinks price is more important than quality, adding that food is the only thing he tries to save money on.

Participant D: Participant D is a Junior at UMass. He started off the focus group by piggybacking off Participant C’s action of using the vending machine because it is convenient, or he will take a fifteen minute walk to Worcester Dining Hall, where he adds on walking that far of a distance in not worth it sometimes. He then adds that he consumes more fast food, where there is a Wendy’s in close range of his dorm, where that is also a convenience factor for him. Participant D usually shops at Target or Walmart and goes once or twice a week, and it is only for cases of water, gatorade, and random snacks. He shops there because he feels it’s the cheapest, trying to keep his budget under $30. He agrees with Participant A when she explains how she will have a larger spending budget when she receives money from relatives during holidays or her birthday. When it comes to how he shops, he tries to get everything in one trip, adding the phrase “smart shopping” to the conversation. He thinks target has higher quality brands when it comes to wholesale, but he also mentions Trader Joes due to the low prices and health factors (dieting). He chooses store brand for some products, but name brand for meat and soda’s. He utilizes coupons whenever he is home with his parents to supply those coupons. He thinks that quality is more important than value. When it comes to price v.s. quality, he chooses quality to an extent because he is still trying to stay under his weekly budget.

Participant E: Participant E is a sophomore at UMass. He took notice of the camera right off the bat and looked alarmed at first, even though the moderator mentioned that the focus group would be recorded. However, our moderator did a great job developing rapport because Participant E opened up and explained his answer for the first opening question. The warm up question indicated he did not know what the study was about, and therefore could not perform interviewer bias-- He mentioned fast food rather than grocery shopping. He states that he noticed he eats out more, particularly fast food since he moved out on his own/went to college. He didn’t respond about where he gets his groceries, but nodded at other responses such as Target/Walmart, and a local grocery store Participant B mentioned called, Big E’s, and Price Chopper. He mentioned in the third question that he shops at Target, Walmart, and Aldi’s because they have non-name brands, but “pretty much the same stuff, just cheaper.” He only goes grocery shopping couple times a month, and spends about $50 which is the highest range, but perhaps because he is shopping less per month/week than the other participants. He nodded in agreement when the moderator asked if they got everything in one trip, which could also explain his $50 budget, as well as the frequency in which he grocery shops. He also mentions that he believes Target has higher-quality goods than Walmart does. He also helped a Participant E name a store that he couldn’t remember: Trader Joe’s.

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Store-brand is fine for him for water because it’s cheaper, but name-brand if it tastes better. For example, he buys store-brand water because it’s cheap rather than name-brand like Poland Spring, but name-brand for certain types of snacks. He also nodded in agreement when Participant F said that he would spend more if he’s going to get the quality out of it. He doesn’t buy that much when he shops, so price isn’t a big deal to him.

Participant F: Participant F is a junior at UMass. Although he had some non-verbal behavior (tapping his foot) that may indicate nervousness for the group, he was an active participant and gave quite a lot of helpful input. His body language subsided throughout the focus group showing a more relaxed posture. Initially, the participant ate at the dining commons, but recently he cut down his meal plan (to save money) and uses about $20.00 a week for grocery shopping rather than eating at the dining commons since his junior year. He also utilizes Big Y because of the free Big Y savings membership he receives as a UMass student, and it is also conveniently located since his bus goes right there from Haigis Mall. He feels as though the prices at Big Y are generally higher (he recognizes this, and is aware of this phenomenon), but supports that the deals are worth it when they have them if he can get twice as much for the price of one. However, he also goes to Stop and Shop and perceives them as having higher-quality items (ie: Boar’s Head, and lunch/deli-meat). He goes shopping either once a week or twice a week because of the commute. He plans on getting everything he needs in one trip, but he can’t get a lot of items because he doesn’t have a car, so oftentimes, he doesn’t buy bulkier, heavier items such as bottled water. Also, he doesn’t want to make two trips since there is a hill going home. He usually spends $20-30 per shopping trip and will spends in the higher range if he doesn't plan on going to the grocery store the following week. He describes Boar’s Head as a higher-quality item. He also agreed with other participants that smaller stores don’t necessarily have higher quality and higher prices, but the same quality with higher prices as Participants A and C mentioned. He usually buys store-brand for most items, but name-brands for items like chicken. For example, he prefers Perdue for the fear of getting sick (ie: Salmonella), and quality taste (ie: chicken that tastes/feels like rubber after being cooked). He states, “If I'm going to pay a lot for it, I’m going to pay a little extra to get the quality that I want.” He also signs up for Big Y e-mail to plan out what to get for lists every week. If he wants to go grocery shopping, he checks the e-mail, or he can skips it when he doesn’t want to go to the grocery store. Or he looks at the flyers in store. He also mentioned that even if he wants something, he will skip it if it costs more. He feels as if quality is important, but price is more important.

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Survey - Inferential StatisticsWe were able to gather 141 completed survey responses. We collected responses from

36 college males, and 65 college females. We also received some respondents who were not enrolled in colleges which were ignored for the purpose of our study.

For our first hypothesis: Students prefer price over quality, we ran a Paired samples T-test. The independent variable is Students, and the dependent variable is price/quality. We used the questions, “Are you currently enrolled as a student at a college or university?” and “Please specify the importance of price, quality, cleanliness, and location on a scale of 1-7.” The independent variable is categorical, and the price/quality variable is continuous. We ran the analysis using SPSS using price and quality as the pair. The two-tailed significance turned out to be 0.008, which is less than the p-value of 0.05, therefore, we can support our hypothesis. We also looked at the differences between the means of price and quality. Price had a mean of 6.00, and quality had a mean of 5.55. Taking the difference of the means: .45, and since our significance value is 0.008 (less than 0.05), we can statistically confident that students prefer price over quality when grocery shopping.

When analyzing our second hypothesis: females will have a more favorable attitudes towards Whole Foods than males, we used the questions “What is your gender?”, and “What is your overall attitude towards Whole Foods?” The independent categorical variable is gender, and the dependent continuous variable is attitude towards Whole Foods. An ANOVA test, and a post-HOC were used to evaluate the results. However, we realized that we only have two groups: male and females, rather than three, so the post-HOC was not necessary. We also ran it through an independent samples t-test to verify. The two-tailed significance was .864, which is more than the p-value of 0.05. Therefore, our hypothesis cannot be supported, and the mean differences do not have to be examined because there is no difference.

Survey - Descriptive StatisticsWhen looking at the results for the top-ranked choices for stores with the “best prices”

from the survey, we saw that Walmart was the dominant store in the category at 53%. This was surprising compared to Dollar Stores, which only 26% of respondents selected as having the best prices. When looking through the results, the most paired with Walmart was Target. On the other hand, the top-ranked choices for stores with the highest quality food was Whole Foods with 68% of respondent’s votes. When looking at the responses individually, the most common pair was Whole Foods and Trader Joe’s as their selection.

Looking into why one might not shop at Whole Foods, we asked why the respondent hasn’t shopped there within the past six months. Going through the individual responses, we found that location (proximity to them), as well as cost, were most common. Many respondents complained that it was too expensive to shop there, stating that it costs them their “whole

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paycheck”. When one respondent did indeed shop there, the display logic directed them to a question where we asked how much they spent, and they admitted that they spent, “too much”.

We were curious to why respondents choose a place to buy their groceries. There were other concerns out there for special diets. For example, some respondents felt that they needed a gluten-free selection, soy milk, and other dietary needs.

SUMMARY OF KEY FINDINGSLocation was a major factor when college students decide where to do their grocery

shopping. A closer location provides convenience, which is important as many underclassmen rely on public transportation. In both the focus group and survey, location was highlighted as a major factor regarding where groceries were purchased. We asked in the survey if there was a Whole Foods within 10 miles of them, and two out of every three respondents (67%) said there was not. While this clearly shows why many college students are currently choosing closer competitors over Whole Foods, it does not provide insight into whether this would change if there was a Whole Foods store more conveniently located within that 10 mile radius of college campuses.

Our hypothesis that students prefer price over quality was supported. However, we were unable to support our second hypothesis that females would have a more positive attitude towards Whole Foods than males.

CONCLUSIONS & RECOMMENDATIONSImplications

The implications we can draw from our results include a few main factors when relating to our hypotheses and overall research objective. First, it would not be favorable for Whole Foods to target the college community with their rapid expansion. As the current Whole Foods image is perceived, the student population we surveyed do not appear to be attracted to the high cost of Whole Foods products. The perfect representation to reflect this is a survey taker’s response to the question, “Why do you choose not to shop at Whole Foods, either currently or in the past?”, who chose to refer to Whole Foods as “Whole Paycheck”. Through similar results to this, we can be quite confident that the prices found at Whole Foods market are not attractive to the student population. Though stating that, Whole Foods must also consider the customer lifetime value of attracting these students while in college. While considering their organization values, Whole Foods could also utilize this data to implement larger sales or student discount membership cards. Or like McMillan’s article about Whole Foods located in Detroit, they could lower their prices to accommodate the cost of living for students.

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As stated above, when considering our results it is important to also weigh those results compared to customer lifetime value of a college student. Further research in CLV would need to occur prior to finalizing any decisions. Whole Foods would need to make large organizational changes in order to become attractive towards the college community. The simplest change would first be to better locate Whole Foods supermarkets. They would be able to continue their current values as an organization, but a location placement in close proximity to local bus routes could increase convenience. Which we believe, in turn would affect student availability, which was one of the largest faults of Whole Foods found in our survey.

Second, our results show that there is no preference found between males and females when considering Whole Foods. This is seen as a positive for our team when creating advertising or promotion plans in the future, we can target the student population as a whole rather than either the male or female segments. Considering the riskiness of targeting the student population (as seen above), this finding does offer a little more confidence to our marketing team. If we do choose to pursue this segment, creating a promotion plan for the entire population of students would be more cost effective and simpler than creating that multiple plans to attract to either the male or female population.

Location is a factor in which 67% of survey respondents did not have a Whole Foods around them. But since they did not have one around, and convenience is a factor, wouldn’t it be wise to put one near them? Would this change the way respondents answer “will you go to Whole Foods in the future?” If Whole Foods was nearer, people would have more opportunities to check it out. We would also be able to gather opinions of more respondents who have been to a Whole Foods before.

LimitationsThrough the focus group, we realized that “value” may have been interpreted differently

than we intended. We meant to transpire it as “low-priced”, “affordable”, “cheap”, whereas the participants decoded it as having both a low-price and high quality. We also had a small budget (a college student sized budget), so the incentives to participate in the focus group may have not been too incentivising for them. We also had an unequal gender distribution in the focus group (4:2 females). Although it did not affect the participation of females being outnumbered, it would be interesting to gather more input from a female perspective. Also, surveyed respondents found in both the focus group and online survey can be described as mostly friends or family members of our group members. This could run the risk of having similarities to our own perceptions. We tend to like people who are similar to us, so this could have been portrayed in their views towards grocery shopping. Although they seemed to demonstrate different values at times, it still ran the risk of the similarity attraction aspect, and thus limiting our scope of survey takers.

For the survey, there was a 38% drop out rate. Looking at the survey, most stopped at the eighth question in which they had to rank their preferences, which was the halfway point of the

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survey completion (50%). We looked into it, and found that perhaps the respondent was overwhelmed by number the choices they had to rank (eleven choices), or confused by the way the question was set up in Qualtrics and did not know how to physically move the choices.

We also were restricted on time. We had about a week for each research method. Had we had more time, we would have run a few more focus groups and had the survey open longer to collect more data.

Future ResearchBecause time was a restricting factor, we would hope to run another focus group, perhaps

with an equal gender distribution. We would also dig deeper into Whole Foods specifically, whereas in our initial focus group, we felt that mentioning Whole Foods may be leading them to answer a certain way or give way to what our research topic was about. A possible way to implement this without giving away the purpose of our survey would be to offer word association with regional grocery stores. This would create a larger variety of stores discussed, while also allowing allowing our group to gage initial perceptions of a variety of competing stores.

We would also walk around campus to gather respondents of surveys. However, this means that we may have to give up jamming on Qualtrics so that the same IP address could be used if we were to allow the respondents to use our own computers. Or we could distribute paper copies of the survey, in addition to or instead of, but they would have to be transferred manually into the computer.

As mentioned before, the customer lifetime value of college students would have to be calculated. Although research has seemed to support that students prefer price over quality, can we still capture this market? If so, how much are they worth? By calculating the customer lifetime value, we can determine if this segment is worth pursuing. We think that students would be profitable because they are so young and have the chance to be lifetime customers, and even recommend to many other people, as well as their children one day. The general target customer for Whole Foods is around 40 years of age, if there are possible ways to attract the same customer 20 years sooner, the possible value they would gain from that customer could be worth making noticeable organizational changes.

In our survey, we asked respondents if there was a Whole Foods within 10 miles of them. However, we didn’t ask if they would go to a Whole Foods if it was near them. Perhaps in the future, we could add a heat map feature that would display a convenient location for the respondent to shop for groceries. Or we could add a simple question that would ask them if they would shop at a Whole Foods in the future if it is located within 10 miles. The difference between questions shows an obvious lack of an action plan. The revised question requests the respondent to state whether they would actually use the convenient location if placed within 10 miles.

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We mostly looked into colleges and universities that were public establishments. However, what would the implications be had we studied private or ivy league college students who may have a more steady income or more disposable income? Would they be more suitable candidates to place a Whole Foods near since they may be able to afford the higher prices? It would be very interesting to study the segment of private school students as they may be less dependent on price and more interested in the quality a company such as Whole Foods offers.

Finally, we could also look into more options of supermarkets that are nationally located. We were most familiar with the New England area, but some respondents were in the South and in the West and did not know some of the stores we listed as mentioned in the concerns comment box at the end of our survey. As mentioned by one survey taker, “we should exhaust all options available.”

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APPENDIXFocus Group QuestionnaireIntroduction and Open ConversationYour answers are strictly for research purposes and will be video-recorded for the

purpose of this study. Your identities are confidential. We encourage all of your thoughts and input. Please keep in mind that there are no right or wrong answers. If something somebody else says gives you an idea, please feel free to add to the conversation.

Questions1. How have your personal food buying habits changed since you started college or started

living on your own?2. Where do you shop for your groceries? What are the reasons you shop at this/these

particular location(s)? 3. Do you find that you consistently shop at one particular store? If so, which store. If not,

what are the different places you purchase your groceries from?4. On average, how many times a week do you do you go shopping for your groceries?5. How much do you typically spend on groceries? 6. Do you have a set weekly budget for groceries? If so, how much do you set aside each

week for purchasing groceries. 7. When you purchase groceries do you find that usually shop for a few things at a time, or

do you typically try to get everything you need in one trip? 8. What are some brands or stores that you consider having higher-quality items? Do you

think the price reflects the quality of these items/stores? 9. What are some brands or stores that you consider having lower-quality items? Do you

think the price reflects the quality of these items/stores?10. Do you prefer to purchase name brand version or the store brand equivalent version of a

product? Why?11. Do you utilize special offers or discounts? Have you ever actively searched for coupons

before shopping? Why or why not? 12. Are there any foods you purchase where money is not an object? Are there any foods you

purchase where money is an object or rather where you look specifically for the best value?

13. When it comes to the food you purchase from the grocery store, is price or quality a greater factor for you? Why?

Debriefing statementWe’re doing a market research study on Whole Foods to determine the balance of price and quality. All of your input is very valuable to us. Again, your answers will remain confidential to the limits of our MKT412 class. If you have any questions, please feel free to ask us, or e-mail us.

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Also, we handed out demographic forms to each respondent to fill out before the focus group started:

This is a confidential survey. If you could please take a moment to answer the following demographic questions to better assist with determining the diversity of our focus group that would be greatly appreciated. Please only respond to questions you feel comfortable answering:

ARE YOU CURRENTLY A STUDENT:

AGE: TYPICAL DINING METHODS (ON/OFF CAMPUS):

RESIDENCY (ON/OFF CAMPUS):

Please circle the one that applies best to you: Live on campus in campus housing/dormLive off campus, with parentsLive off campus on ownLive off campus with roommates

EMPLOYMENT STATUS (YES/NO):

APPROXIMATE DISPOSABLE INCOME:

Survey Questions and ChoicesPlease answer these questions truthfully and as completely as possible, there is no right or wrong answer for the following questions.. This survey is conducted for the purposes of a MKT412 class at the University of Massachusetts. Your answers will not be shared with any sources outside of the classroom and your name will not be associated with any of your answers. Thank you for taking this time to participate. They survey should take about 10-15 minutes.

1. What is your gender?MaleFemale

2. Are you currently enrolled as a student at a college or university?YesNo

3. Please describe your current housing arrangements:On-Campus housingOff-campus, living with parents

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Off-campus, living aloneOff-campus, living with roommates

4. Please describe your typical dining methods:Dining on-campus- meal plan, or no meal planDining off-campus - restaurant, take-out, fastfoodDining off-campus - homemade meals

5. What is your average weekly spending budget for food and/or groceries?$0-$20$21-$40$41-$60$61-$80$81-$100$101+

6. How often do you shop for groceries?Daily (5-7 times a week)Frequently (3-4 times a weekOccasionally (1-2 times a week)Rarely (1-2 times a month)Never, I do not typically grocery shop.

7. Do you shop at one grocery store, or multiple grocery stores?One grocery storeMultiple grocery store

8. When shopping for groceries, please rank the below grocery stores by your personal standards. 1= first choice, 11 = last choiceStop & Shop/ Giant Grocery Stores/Shaw’sBig Y SupermarketsWalmart SuperstoresWhole Foods MarketsSuper TargetAldiDollar General/Family Tree/Family DollarTrader Joe’sPrice Chopper/Save-A-Lot/Price RiteCostco/BJ’sCVS/Walgreen’s/Rite Aid

9. Please specify the importance of the following criteria for where you shop: 1=not at all important, 7 = extremely important

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10. Please indicate what each store BEST represents in your opinion:

11. In your opinion which TWO grocery stores come to mind first for the best quality products in the industry?Stop & Shop/ Giant Grocery Stores/Shaw’sBig Y SupermarketsWalmart SuperstoresWhole Foods MarketsSuper TargetAldiDollar General/Family Tree/Family DollarTrader Joe’sPrice Chopper/Save-A-Lot/Price RiteCostco/BJ’sCVS/Walgreen’s/Rite Aid

12. In your opinion, which TWO grocery stores come to mind first for the best prices in the industry?

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Stop & Shop/ Giant Grocery Stores/Shaw’sBig Y SupermarketsWalmart SuperstoresWhole Foods MarketsSuper TargetAldiDollar General/Family Tree/Family DollarTrader Joe’sPrice Chopper/Save-A-Lot/Price RiteCostco/BJ’sCVS/Walgreen’s/Rite Aid

13. What is the closest grocery store near you?Stop & Shop/ Giant Grocery Stores/Shaw’sBig Y SupermarketsWalmart SuperstoresWhole Foods MarketsSuper TargetAldiDollar General/Family Tree/Family DollarTrader Joe’sPrice Chopper/Save-A-Lot/Price RiteCostco/BJ’sCVS/Walgreen’s/Rite Aid

14. Is there a Whole Foods near you within 10 miles?YesNo

15. Have you shopped at a Whole Foods grocery store in the past 6 months?YesNo

16. Why do you choose not to shop at Whole Foods, either currently or in the past?_______

17. On average, during a typical visit, how much did you spend at Whole Foods?_______

18. What is your overall attitude towards Whole Foods?One of the worstBelow AverageAverageAbove AverageOne of the best

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19. Do you plan on going to Whole Foods in the future?YesNo

20. What is your overall opinion of Whole Foods?__________

21. When choosing a grocery store, what influences your decisions the most? Please pick ONE.PriceQualityConvenience/LocationOther ____

22. Do you have any comments, questions or concerns? Please let us know in the text-box below! Thank you for your participation in this survey! Your input is important to us, and helps the MKT412 class._________

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References

Durham, N. (2015, January 16). Student life: Eating healthy on a budget. Retrieved February 5,

2015, from http://www.colorado.edu/news/features/student-life-eating-healthy-budget

Food Trends of College Students. (2008, April 16). Retrieved February 5, 2015, from

http://www.hartman-group.com/hartbeat/food-trends-of-college-students

McMillan, T. (2014, November 19). What Happened When Whole Foods Tried to Challenge

Elitism, Racism, and Obesity in Detroit. Retrieved February 5, 2015, from

http://www.slate.com/articles/life/food/2014/11/

whole_foods_detroit_can_a_grocery_story_really_fight_elitism_racism_and.html

Mintel. (2015). Colleges and Universities Foodservice – US – May 2014. Retrieved from Mintel

Oxygen database

Mission & Values. (n.d.). Retrieved February 5, 2015, from

http://www.wholefoodsmarket.com/mission-values

Newman, J. (2013, December 12). Survey Shows Students Want Better Quality Food. Retrieved

February 5, 2015, from

http://oracle.newpaltz.edu/survey-shows-students-want-better-quality-food/

Student Watch: Behavior and Trends of Student Consumers. (2011). Retrieved February 9, 2015,

from http://www.nacs.org/email/html/OnCampusResearch/SPR-080-03-12_Client

Newsletter.pdf

Whole Foods Market. (n.d.). Retrieved February 5, 2015, from

http://www.wholefoodsmarket.com/

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